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DECREE

Promulgating the Regulation on the exercise of democracy in joint-stock companies and limited liability companies

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

After reaching agreement with the Vietnam General Confederation of Labor;

At the proposal of the Minister of Home Affairs,

DECREES:

Article 1.- To promulgate together with this Decree the Regulation on the exercise of democracy in joint-stock companies and limited liability companies.

Article 2.- This Decree takes effect 15 days after its publication in "CONG BAO." Previous regulations on the exercise of democracy which are contrary to the Regulation promulgated together with this Decree are annulled.

Article 3.- Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People's Committees shall implement this Decree.

Managing Boards, Members' Councils, presidents, general directors and directors of joint-stock companies and limited liability companies shall implement this Decree.

On behalf of the Government

Prime Minister

NGUYEN TAN DUNG

REGULATION ON THE EXERCISE OF DEMOCRACY IN JOINT-STOCK COMPANIES AND LIMITED LIABILITY COMPANIES

(Promulgated together with the Government's Decree No. 87/2007/ND-CP of May 28, 2007)

Chapter I

GENERAL PROVISIONS

Article 1.- Scope and subjects of application

1. This Regulation provides for the exercise of democracy in joint-stock companies and limited liability companies set up and operating under the 2005 Enterprise Law (below collectively referred to as companies).

2. This Regulation applies to Managing Boards, Members' Councils, presidents, general directors and directors of joint-stock companies and limited liability companies (below collectively referred to as company managers); grassroots trade union executive committees or provisional trade union executive committees; and laborers in joint-stock companies and limited liability companies.

Article 2.- Purposes of the exercise of democracy in companies

1. To create conditions for laborers to know, comment and decide on, and supervise issues related to their rights, interests, obligations and responsibilities.

2. To raise responsibilities and obligations of company managers towards laborers; to create conditions for companies' political and socio-political organizations to operate according to law in the exercise of laborers' right to democracy.

3. To establish harmonious and stable labor relations, contributing to limiting and preventing labor disputes in the course of production and business.

Article 3.- Rights and obligations of company managers and laborers

1. Company managers and laborers are obliged to strictly perform labor contracts and collective labor agreements and observe companies' internal rules and regulations and current provisions of law related to their rights and obligations.

2. Laborers may participate in supervising the implementation of mechanisms and policies related to their lawful and legitimate interests as well as their obligations in accordance with law.

3. Laborers may join political organizations, socio-political organizations or socio-professional organizations in accordance with law.

Article 4.- Rights and responsibilities of trade unions in the promotion of laborers' democracy

1. The trade union of a company represents and protects the lawful rights and interests of the company's laborers and labor collective, is responsible for organizing activities for laborers to exercise their right to know, participate in, inspect, supervise, and decide on, issues directly related to them.

2. The head of the trade union of a company or the person authorized by the company's trade union executive committee may be invited to attend meetings of the company's Shareholders' Meeting or Members' Council and may comment on issues related to the lawful and legitimate rights and interests of the company's labor collective.

Article 5.- Organization of conferences of a company's laborers

1. Annually, the company management shall assume the prime responsibility for, and coordinate with the trade union executive committee in, organizing conferences of the company's laborers.

2. A conference of a company's laborers mainly discusses solutions to achieve production and business targets already approved by the Shareholders' Meeting or the Members' Council; assess the implementation of the collective labor agreement and the company's internal rules and regulations; and discuss other issues related to laborers' lawful and legitimate rights and interests.

Chapter II

CONTENTS TO BE PUBLICIZED BY THE COMPANY MANAGEMENT TO LABORERS

Article 6.- Contents to be publicized by the company management to laborers

1. State regimes and policies directly related to laborers.

2. Annual tasks and planned targets of the company, sections, departments, workshops, production groups and teams.

3. The company's internal rules and regulations:

a/ Labor rules, labor safety equipment, machine and equipment operation processes; labor safety, labor sanitation, environmental protection, fire and explosion prevention and fighting rules;

b/ Salary and bonus regulations;

c/ Regulations on labor norms and contractual norms;

d/ Emulation and commendation regulations.

4. Deduction for setting up and use of the company's funds related to laborers:

a/ Levels of deduction for setting up annual reward and welfare funds under decisions of the Shareholders' Meeting or the Members' Council;

b/ Contribution to the trade union fund;

c/ Deduction for payment of social and health insurance premiums.

5. The company's annual financial issues related to laborers.

6. The company's charter.

7. Other contents as provided for by law.

Article 7.- Modes of publicization

Depending on the to-be-publicized contents, company management shall assume the prime responsibility for, and coordinate with the trade union in, selecting the following modes of publicization:

1. Announcement at conferences of the company's laborers.

2. Announcement at briefing meetings.

3. Announcement directly to laborers or via the company's internal information system.

4. Announcement to sections, departments, workshops, production groups or teams.

5. Announcement to the company's trade union executive committee or provisional trade union executive committee.

6. Other modes.

Chapter III

CONTENTS TO BE COMMENTED BY LABORERS

Article 8.- Contents to be commented by laborers

1. Elaboration, and organization of implementation, of internal rules and regulations specified in Clause 3, Article 6 of this Regulation.

2. The draft of the collective labor agreement or its amendments or supplements before signing.

3. Solutions to raising labor productivity and product quality, reducing prices, saving materials and raw materials, ensuring labor safety, labor sanitation and environmental protection, improving working conditions, and arranging labor.

4. Other issues related to laborers' interests and obligations.

Article 9.- Modes of comment giving by laborers

1. Through conferences of the company's laborers.

2. Through working meetings of sections, departments, workshops, production groups or teams.

3. Through dialogues between the company management and the labor collective.

4. Through the trade union.

5. Through mailboxes.

6. Through routine meetings between the company management and laborers.

Chapter IV

CONTENTS TO BE DECIDED BY LABORERS

Article 10.- Contents to be decided by laborers

1. Signing and termination of labor contracts under the provisions of labor law.

2. Adoption of the contents of a collective labor agreement or of amendments or supplements to a collective labor agreement before it is signed by a representative of the company’s trade union executive committee or provisional trade union executive committee with the company management.

3. Adoption of resolutions of laborers' conferences.

4. Other contents as provided for by law.

Article 11.- Modes of decision making by laborers

Laborers may decide on the contents specified in Article 10 of this Regulation by the following modes:

1. Making written decisions by themselves.

2. Voting at laborers' conferences.

3. Through the company's trade union.

Chapter V

CONTENTS TO BE SUPERVISED BY LABORERS

Article 12.- Contents to be supervised by laborers

1. Implementation of resolutions of laborers' conferences.

2. Implementation of the company's internal rules, regulations and charter.

3. Implementation of the collective labor agreement.

4. Performance of labor contracts.

5. Implementation of regimes and policies towards laborers; collection and use of funds contributed by laborers.

6. Results of settlement of complaints, denunciations and labor disputes.

7. Annual emulation and commendation results.

Article 13.- Modes of supervision by laborers

1. Through the company's trade union.

2. Through making comments, petitions, complaints or denunciations under the provisions of law.

Chapter VI

ORGANIZATION OF IMPLEMENTATION

Article 14.- Company managements shall assume the prime responsibility for, and coordinate with trade union executive committees or provisional trade union executive committees in, organizing the implementation of this Regulation.

Article 15.- The Ministry of Home Affairs shall assume the prime responsibility for, and coordinate with provincial/municipal People's Committees in, directing and inspecting the implementation of this Regulation, and annually report on implementation results to the Government.

Article 16.- The Ministry of Labor, War Invalids and Social Affairs shall coordinate with the Vietnam General Confederation of Labor in guiding the organization of activities of conferences of laborers at companies.

Article 17.- Companies, organizations and individuals that record achievements in implementing this Regulation are entitled to commendation and reward in accordance with law. Organizations or individuals that violate this Regulation shall, depending on the nature and severity of their violations, be administratively sanctioned or examined for penal liability according to law.